TransUnion Study Finds Suspected Digital Fraud Rate in the Philippines Significantly Higher than Global Average

• Insights revealed that 8.3% of digital transactions when the consumer was in the Philippines in 2023 were suspected to be Digital Fraud – 66% higher than the 5% global average
• Higher suspected Digital Fraud rates at earlier stages in the consumer journey indicate a diversification of fraudulent tactics
• Retail emerged as the industry most targeted by Digital Fraud for transactions when the consumer was located in the country, followed by financial services and communities

Manila, Philippines, May 16, 2024 – Based on recently released proprietary insights from TransUnion’s (NYSE: TRU) global intelligence network, the company found that 8.3% of all digital transactions where the consumer was in the Philippines were suspected to be Digital Fraud in 2023. This number is 66% higher than the global suspected Digital Fraud rate of 5% over the same period as reported in the TransUnion 2024 State of Omnichannel Fraud Report.

The report further revealed that the volume of suspected Digital Fraud globally grew faster than the actual number of digital transactions worldwide. The volume of suspected Digital Fraud globally increased 14% year-over-year (YoY) in 2023 and 105% from 2019 to 2023, outpacing the 6% growth in digital transactions between 2022 and 2023, and 90% from 2019 to 2023.

Account login presents highest risk in consumer journey

Findings from the report also indicated a possible shift in tactics employed by fraudsters attempting to engage with potential victims at an earlier stage in their consumer journey. For digital transactions where the consumer was in the Philippines, 13.3% of transactions associated with account logins were suspected to be Digital Fraud in 2023.

The second highest percentage of suspected Digital Fraud in the customer journey was account creation with 3.2% of those transactions suspected to be Digital Fraud. The occurrence of suspected Digital Fraud at the initial stages of account login and creation is significantly higher compared to the final financial transaction stage which had a rate of 1.2%. This stage usually involves activities such as purchases, withdrawals and deposits, which typically take place towards the end of a customer’s journey.

“This rise in suspected Digital Fraud in the account login and creation stages of the consumer journey may represent a paradigm shift of sorts among fraudsters,” said Yogesh Daware, chief commercial officer at TransUnion Philippines. “Alongside traditional tactics to gain access to and ultimately compromise existing accounts, fraudsters are also increasingly choosing to create new accounts that they can control themselves. As data breaches continue to pose a threat to sensitive or confidential information across various industries in the Philippines¹, fraudsters could possibly leverage synthetic identities assembled in large part using credentials gathered from such incidents.”

Retail identified as the industry most targeted by suspected Digital Fraud in the Philippines

The report further revealed that for transactions where the consumer or fraudster was located in the Philippines, the industry that saw the highest suspected Digital Fraud rate was retail at 11.8% in 2023 despite being down 18% from 2022. This was followed by financial services at 10% and communities (online dating, forums, etc.) at 5.2%.

Financial services tallied the greatest increase in the suspected Digital Fraud rate, up 41% in 2023 from 7.1% in 2022. While the total number of financial services digital transactions when the consumer was in the Philippines was 51% higher in 2023 compared to the previous year, the volume of suspected Digital Fraud in this industry significantly outpaced this growth, with a surge of 113% from 2022 to 2023.

Retail saw the highest suspected Digital Fraud rate in 2023 in the Philippines,

while financial services saw the highest growth rate

Source: TransUnion TruValidate™

“While the global retail industry has consistently been among those with the highest suspected Digital Fraud attempt rates in recent years, we saw it placed at the top of the list both locally and globally in 2023. More concerning is the situation in the Philippines, where the suspected Digital Fraud rate across various industries exceeds global averages, except for telecommunications,” said Daware. “As a result of credentials stolen in data breaches, it has become increasingly easy for fraudsters to perpetuate attacks that leave consumers vulnerable to account takeover at an earlier stage in the customer journey. In response to this, it is crucial for organizations across industries to take proactive measures to enhance their protection throughout the entire customer lifecycle. This entails strengthening capabilities at every touchpoint to ensure comprehensive protection for both businesses and consumers.”

TransUnion came to its conclusions about Digital Fraud based on intelligence from its identity and fraud product suite that helps secure trust across channels and delivers efficient consumer experiences – TransUnion TruValidate. The rate or percentage of suspected Digital Fraud attempts reflect those that TransUnion customers determined met one of the following conditions: 1) denial in real time due to fraudulent indicators, 2) denial in real time for corporate policy violations, 3) fraudulent upon customer investigation, or 4) a corporate policy violation upon customer investigation — compared to all transactions it assessed for fraud.

Download the TransUnion 2024 State of Omnichannel Fraud Report to learn more. Specific country and regional data in the report includes Botswana, Brazil, Canada, Chile, Colombia, the Dominican Republic, Hong Kong, India, Kenya, Mexico, Namibia, the Philippines, Puerto Rico, Rwanda, South Africa, Spain, the United Kingdom, the United States and Zambia. 
 

¹https://privacy.gov.ph/dbnmslivestats/